The southern strategy bites back

The Thinker by Rodin

Washington Post columnist Eugene Robinson recently wrote that Donald Trump has changed the Republican Party permanently. In the past the establishment elite controlled the party. Unfortunately well-moneyed Republicans were relatively few in number. They had to find votes somewhere so they adopted a “southern strategy” that pandered to the fears and prejudices of those principally in the south. This included crass appeals to classists, racists, fundamentalist Christians and to those who wished for things to be the way they were in the 1950s, you know, when non-whites knew their place.

It worked quite well. Essentially the Republicans picked up formerly white southern Democrats when Democrats (some say unwisely) moved toward being more inclusive instead of the party of the white working class. Starting with Richard Nixon, Republicans realized that catering to people’s prejudices was a reliable vote getter. Republicans stoked then exploited these class divisions and anxieties so well that today the south and much of the non-coastal west is now a deep shade of red. Robinson said that Trump’s genius was to call to task Republicans because they didn’t follow through on their promises to this new base, actions like sending undocumented immigrants home. He said that Trump has fundamentally changed the party, wresting control from its establishment and making it explicitly a party centered on addressing these fears rather than merely pandering to them.

It used to be that in the Republican Party the tiger controlled its tail. The tail (the Tea Party, racists and Christian fundamentalists) now appears to control the party. We’ll find out for sure if Trump wins his party’s nomination. Even if Trump somehow slips, anyone who takes his place will have to sound a lot like him, which is why Ted Cruz won’t say anything bad about Trump while echoing most of his talking points. Counterproductively, the remaining Republican candidates are busy criticizing each other instead of focusing on Trump, at best a pennywise but pound-foolish strategy.

The Republican Party is thus on the cusp of becoming an officially anti-democratic party. It’s clear this is where they’ve been heading for a long time given their hostility toward the poor made manifest in egregious gerrymandering and increasingly odious voting restrictions. It’s like George Orwell’s Animal Farm and Republicans have decided they are the pigs. What Republicans don’t want to admit is that any control they get must be tenuous at best, as the nation’s changing demographics will eventually overwhelm them. They already recognize their reality by creating egregious voter restriction laws. These stack the deck in their favor but they cannot last forever.

Trump’s policies are popular with his supporters because he is proposing actions that explicitly redress these problems. He wants to deport the undocumented and cut off a path to citizenship for those here legally. Do this and you can at least push off the date of white disempowerment. When Trump proposes a wall along our border with Mexico, what his supporters hear is not that it will deter the undocumented from coming into the United States, but that it is a concrete step toward moving us back to the 1950s when they were in charge and minorities knew their place.

An explicitly anti-democratic party should be very scary to the rest of us. It suggests that Republicans want a radical change to our constitutional government. Trump’s words at least suggest he plans to govern by fiat if he cannot get his way.

It’s understandable that many voters are frustrated with the gridlock in Washington. I am one of them. They want to elect someone that can end it. By supporting someone who will use non-constitutional means though, they tacitly are saying that this is the only way things can change. If elected, Trump’s methods appear to be to take action unlawfully and unilaterally if necessary. He can say that he ran on this promise, voters voted him in anyhow and thus he has their sanction. However, the problem of Washington gridlock has everything to do with excessive gerrymandering that Republicans spent decades working on to garner disproportionate political power. Gerrymandering gives power to the extremes and disempowers the middle.

Curiously many of Trump’s political supporters are not new Republicans but frustrated disempowered people in the middle who see him as their savior. You can see this because some of Trump’s policies are not traditionally conservative at all. His supporters are less concerned with whether the policies are conservative but whether he can make government function for the people again. They see Trump as a man of practical action who by using the force of personality and the presidency will untangle this Gordian knot. For decades the disenfranchised white working class has propped up the Republican Party’s power, with little to show for the support they were given. This gave an opening for the daring (Trump) to exploit.

I contend that what really irks Trump supporters are not the loss of white political power, but their ability to influence politicians to work for the middle class, as evidenced by their declining wages and more problematic standard of living. As Jimmy Carter has pointed out, we effectively live in an oligarchy now. The Republican Party is the champion of the oligarchy. And the oligarchy wants a sense of stability that leaves them in charge. Then they can exploit government and the country for their benefit, which in recent decades has meant a decline in the standard of living for most of us by redistributing income to the rich.

Trump supporters are realizing that they have been had and their votes for Republicans have been counterproductive, but for many they still can’t vote for a Democrat because most Democrats don’t believe in the specialness of whites that Republicans have skillfully exploited. However, it’s why Bernie Sanders can appeal to many Trump supporters, and visa versa, by channeling their economic frustrations. Both are speaking to them in a language they understand. Trump though has chosen to pander to the white working class.

Both parties have exploited working whites for many decades. Whites perceive that Democrats favor minorities at their expense, which they attribute to erosion in their standard of living. They also perceive that Republicans pander to them for votes but give power to the oligarchy instead. They don’t realize that by uniting with many of those they instinctively revile that government could work for them, and in the process work for everyone else too.

To make that leap they must see behind the façade, which is that white Christians are somehow more special than everyone else. I expect the smarter Trump supporters will leach off toward supporting Bernie Sanders instead.

Trump is a showman and a fraud. Those who want the real deal though need to support someone whose entire career has been toward making the government represent the people. By raising the boats of the middle and lower classes, the anxiety about these others should ease.

The libertarianism in the Internet

The Thinker by Rodin

It can be dangerous when politicians open their mouths. In the case of Donald Trump, it’s because he spews hatred and racism and has gathered support from a lot of dittoheads for doing so. But in one way both he and Hillary Clinton have something in common: they don’t really understand the Internet. It would have been wise to defer saying anything at all when you really don’t know what you are talking about.

Trump’s mistake was saying that he was open to closing parts of the Internet as part of the war on the Islamic State, a war that has never been officially declared. I can give Trump only half a demerit because he was prompted by CNN’s Wolf Blitzer’s question, which asked if he would do this, and it’s really a trick question. If Trump knew what he was talking about he’d have said, “Well, of course that’s not possible.” Hillary Clinton opened her mouth a bit too wide in last Saturday’s debate she said that some sort of Manhattan-like project could allow the government to decrypt messages while ensuring everyone’s privacy. But at least she said, “I don’t know enough about the technology”. So a point to her for honesty.

If you want to kill the Internet, kill all the people. Even that won’t work immediately. All those routers would still be moving data around, but no one would be around to read any of it so it would effectively be dead. Why is this? It’s because the Internet was designed to be resilient and effectively unstoppable. What secret communist organization was responsible for such a nefarious deed? Why, that would be the United States Department of Defense. More specifically, it was DARPA: the Defense Advanced Research Projects Agency, known back in the 1960s when it was creating the Internet as ARPA.

And it made sense. At that time, the Internet was not envisioned to be a global network for just anyone, but it was designed to make sure that defense establishments and universities doing defense work could chat with each other electronically and move files around this way. The architecture that was designed ensured that if one path between sender and receiver was down or slow, some other path would be chosen instead. The message had to get through. On the plus side, at least in its initial phases, the Internet was all plain text. Encryption was not a worry because it was not a classified network, but where it was a worry secure lines were leased from the telephone company.

Today’s Internet is basically the old ARPANet’s infrastructure from the 1970s open to everyone. Everyone used it because it was the only model out there but also because it was noncommercial and standards-based. Some private networks from the distant past you may remember tried to do something similar: Compuserve and AOL were two that discovered it could not compete with the awesomeness of the real Internet, once people could access it.

We can’t shut down the Internet on the Islamic State. We can certainly make it more difficult but alas, as the Internet has evolved, so too have the ways to transmit and receive signals. In the old ARPA days I’m pretty sure the only way was to lease lines from AT&T. Today the Internet goes across virtually all data networks. Shut down the Islamic State’s landlines and they will use cell towers. Take down cell towers and maybe they will use microwave relays or satellite dishes. Take down the dishes and they can use portable satellite phones. In any event there are plenty of IS-related terrorists not actually in the Islamic state and they can chat between themselves, it’s just that they will have an easier time of it than those in the Islamic State.

Those of you out there wondering what a libertarian world might look like can see it in the Internet. The Internet excels at fast and disparate information sharing. It also excels in being able to get its messages through come hell, high water or terrorists. No one back in the 1960s could project what the Internet would morph into, but it was all based on protocols that from day one were open and designed to move data quickly. These protocols can be changed, but only in an evolutionary manner if they become a consensus adaptation. Even so, the old protocols will continue to traverse the Internet and all that is needed is the software to send or receive Internet Protocol (for packets) and Transmission Control Protocol (for a message made up of packets). And TCP/IP protocol is built into virtually every computer that communicates with another computer, not to mention all the switches and routers between sender and receiver.

Obviously this architecture has some problems, which are not problems if you are a libertarian. You want the free flow of information and you don’t want government controlling or monitoring it. The good part is the enormous amount of information sharing that occurs that makes our lives such much more interesting and rewarding. The bad side is it empowers terrorists, child pornographers and general criminals to do the same thing.

As for encryption, this is not something where you can have your cake and eat it too. The NSA cleverly put in encryption backdoors into products sold by most of these encryption devices. The encryption industry is now onto this. Tech savvy criminals have already found solutions like OpenPGP, which can likely keep the NSA from eavesdropping, at least in real-time. The government is getting better and faster at decrypting messages by throwing massive parallel computers to decrypt them. Moore’s Law is making it possible to decrypt almost any message without waiting for days, months or years for an answer. Obviously the NSA needs to be pretty selective when they throw these sorts of resources onto decrypting a message.

There is no “let’s have our cake and eat it too” solution to decrypting intercepted messages in real-time. The NSA with its private-key backdoors already tried it, but that’s not an issue if you use devices that don’t have these backdoors. Like it or not, the Internet is must-have technology and it will be used for purposes both good and bad. There is no tech fix to these problems.

However, a social strategy will help somewhat. Encouraging good citizens to rat on their fellow citizens they suspect of illegal use of the Internet is probably the only pragmatic way to address this issue. In that sense, the libertarians, courtesy of the U.S. Department of Defense, have already won.

Give us a real retirement (or the 401K/IRA trap)

The Thinker by Rodin

There are some proposals afloat (from progressives naturally) to increase social security payments. Social security used to be enough to marginally live on with Medicare helping by reducing health care cost spikes. Social security is supposedly indexed for inflation but it’s clear that the index doesn’t measure the true cost of living. If you depend almost entirely on social security, you are either slipping into poverty or are already there. So conceptually Senator Elizabeth Warren’s idea looks like a good one. The money will get quickly spent anyhow, which will boost the economy. Of course either deficits will increase or taxes will need to be raised to pay for it. There’s no consensus to do either, so seniors (those that can) do their best to get by. In many cases they remain partially or fully employed while being “retired”. I see them all the time at the registers of my local Costco.

Social security was never designed to keep you fat and rich in retirement, just set a basic floor above the poverty line. The assumption was that the house and cars were paid off so it would allow you to live modestly where you were at. If you desired a richer standard of living, you drew off any pensions or retirement savings that you might have. Pensions are much better than retirement savings but turned out to be too expensive for many companies to continue to voluntarily fund. The alternative, when they were offered at all, was a 401K or similar retirement savings plan. Better employers match your contribution up to a certain amount. If you didn’t have a 401K plan at work, you still had the option of an Individual Retirement Account (IRA).

IRA’s sound good in principle too, but they require you to be proactive, i.e. regularly put a portion of your income aside. Worse, you shouldn’t touch the money. If you do touch it you must refund your account with interest and pay a penalty. The problem with an IRA was that even if you were methodical about putting money aside you couldn’t put a whole lot of it aside. This year you can put up to $5500 a year into a traditional or Roth IRA.

Assuming a middle class income of $50,000 a year or so, putting $5500 into an IRA amounts to ten percent of your salary, a high hurdle that most cannot make. But let’s say you manage to sock $5000 a year aside and do so for 40 years, something that would be excruciatingly hard for most of us with expenses like rent, car payments and childcare. Let’s say you somehow managed to earn six percent on the investment after fees. This means after forty years you would have $772,000 to help you live a nicer retirement. Is this enough?

You would think that the answer would be yes. Let’s say you expect to have thirty years in retirement, which means you could withdraw $25,700 a year over thirty years before running out of money. The amount you would get from social security would depend on how many years and how much you contributed to it. In 2011, the average social security check was $1180 a month. Without a pension or matching contributions from your employers to your 401K, this means an income of $3321 a month, or $40,000 a year.

Remember this is the best realistic case for a person that self funds their retirement because their employer won’t. It assumes a middle class wage earner, say a skilled mechanic, who is methodical about investing for retirement and can do so consistently. If your house is paid off do you think you can live comfortably on $40,000 a year in retirement? Most likely you are shaking your head. Since this is the best realistic case, your actual yearly retirement income is probably more like $20,000 to $30,000 with social security, absent other sources of income. No wonder I see so many grandmas and grandpas working at Costco. What they needed was a pension, but since their employer didn’t provide one they are making up the difference with a (probably part time) job at Costco. Costco at least provides a living wage, so perhaps they are supplementing their retirement income by $20,000. Maybe with working they have $50,000 in income per year. Is that enough to live on? Maybe, but you are working and not really retired.

My point is that 401Ks and IRAs are not viable retirement solutions for almost all of us, even with social security, although they were sold as real solutions. Moreover, social security income is not keeping up with the true cost of living. Sometimes even with a pension you don’t earn enough. This is the case with my brother in law. He retired some two decades ago on a community college pension where he worked programming the college’s mainframe computers. My sister (his wife) is in her sixties. He’s probably at or around seventy. She’s earning some money as an in-home health care aid, likely at less than $15 an hour. Last I heard he was helping manage a Disney store at Orlando International Airport. They get by, but at best they are partly retired.

We either have to give up the idea of ever really retiring or we need to find a way to fund retirement so that your retirement income is somewhere in the range of 70% to 80% of your pre-retirement income, which financial planners say you need to have something close to the same standard of living you had before retirement. To consider what a high hurdle that is, most financial planners (like ours) say not to withdraw more than 3% from your portfolio a year, at least if you want to maintain its value and have something to pass on or some extra savings to fall back on if you live to 100. This means if you want $60,000 in income per year from your retirement savings, you need to retire with a nest egg of $2,000,000. Yowza!

What we really needs are real pensions again. I know what you are thinking, “Isn’t social security a pension?” Well, yes, sort of, just a subsistence pension and it is funded jointly between the employer and the employee. It’s not a living pension, i.e. the sort of pension your parents or grandparents routinely got. Employers don’t have to provide pensions and most won’t. Moreover, many that did have pensions have reduced benefits or have turned the problem over to the government when the fund became insolvent. The real issue was that the private pension system became unworkable, mostly because Congress let it get that way. This doesn’t mean that a real public pension system couldn’t work instead.

Think of such a system as social security on steroids, or perhaps social security evolved. The problem is how to make such a system solvent. Asking employees to contribute too much more probably does not make much sense although many employees would be happy to contribute their 401K contributions toward a public pension system for a higher pension on retirement. Such a system could be funded through taxing employers more. Corporate taxes after all are a smaller and diminishing portion of total federal income, as corporations get increasingly clever at dodging these taxes. This means companies like General Electric pay virtually no federal income taxes. It shouldn’t be hard to have laws that would require GE to pay enough in taxes to fund a public pension for its employees. It would probably be pocket change to their overall profits.

Just as we have a graduated income tax where higher income taxpayers pay proportionally more of their income than lower income taxpayers, the same thing could work in the corporate (and non-profit) world to fund a public pension for all workers. It’s understood that Dollar General’s profits per employee would be lower than GE’s, so their taxes for funding a public pension system would be lower. The government actuaries would have responsibility for making sure it is doable. If some of GE’s contributions effectively go to prop up the pension of Dollar General employees, that’s perfectly fine as the costs are being socialized across the public at large. This is the way insurance works, after all. Companies will come and go but the government does not. If Dollar General goes belly up, whatever replaces it will pick up its slack.

So this is my solution. If this required funds to be invested in well-managed stocks or bonds, using a life cycle fund approach, I am fine with that, as long as those investing these funds are held to a fiduciary standard. Expecting that people can self-fund their own retirement anymore is unrealistic. I hope my analysis show why this is so. Someone has to pick up that slack.

Taxing the profits of corporations (similar payments would be needed from non-profits) for the purpose of public pensions could allow people to have actual retirements again, like your parents or grandparents had. We just have to choose to act.

Following the leader

The Thinker by Rodin

Oh good, I’m not the only one horribly alarmed by Donald Trump. Actually there are plenty of us, including the editorial staffs of The New York Times and The Washington Post. It shouldn’t take much to feel very alarmed if you actually listen to what Trump has to say. He asserts wild claims as facts that are wholly untrue; such as thousands of Muslims in America were cheering when the Twin Towers went down on 9/11. If that weren’t enough, he is now openly racist. This should not surprise anyone who has been paying attention to him. Trump is one of the earliest to claim that Obama was not born in the United States. Now when members of his overwhelmingly white audiences beat up Black Lives Matters protestors at his rallies, he encourages their lawlessness by saying that maybe protestors had it coming. He wants more waterboarding of terrorist suspects, and wants to surveil American Muslims and mosques.

Normally competing candidates would distance themselves from such wild remarks. With one exception though the remaining Republican candidates seem to be busy following the leader, moving sharply to the right on most of these issues and at best offering nuanced differences between themselves and Trump. I had thought for a long time that the Republican Party was a racist party. Research now proves me right. Some will doubtless point out the success of some black candidates like Ben Carson as proof that the party is not racist. However, when a Carson or Herman Cain comes along they only “succeed” when they parrot principles that keep members of their own race from succeeding. In short, if a black candidate in the Republican Party is stupid enough to say stuff that amounts to “let the beatings on us continue” then the party is happy to let them in.

Still, it’s very discouraging to realize that the Republican Party is basically about maintaining white privilege at all costs. This is after all the party that succeeded in freeing the slaves. Republicans talk all about their party being for an opportunity society while giving those without opportunity fewer means to climb the ladder. In fact, they work actively to remove rungs from that ladder. They actively disenfranchise voters likely to vote for candidates they don’t like. Most red states won’t extend the Medicaid franchise to the working poor (which includes lots of whites). With Medicaid there is some semblance of a floor under their feet that might allow them to get to the next rung. They actively whip up the poorer white folk to work against their own interests. Kentucky governor-elect Matt Bevin won office principally from votes from poor white Kentuckians who are likely to have their new Medicaid benefits (under a KyNect program umbrella) removed. It’s so sad to see these racial levers pushed because it depends on selling poor white people on the notion that they may be poor but are “better” than their darker poor neighbors because they don’t get help from the government, help they desperately need simply to survive.

In any event Trump has moved from carnival barker to pied piper. If the Republican Party were a church, a great revival would be underway, the parishioners would be dancing in the pews and more than a few would be talking in tongues. Trump has effectively hypnotized his own party and has whipped them into a frenzy. He is counting on this of course, because enthusiastic voters vote disproportionately and he will need an overwhelming white vote and a lackluster Democratic vote to win the presidency. The nightmare for most of us is imagining how a President Trump would actually govern. One would hope he would quickly sober up, but there is little likelihood of that. This is because he shows no signs that he actually believes and respects the constitution and laws of the United States.

Trump is an egomaniac. He believes himself not only gifted but also faultless. Of course he is the only person savvy enough to navigate us through these turbulent times, in spite of his many failed marriages and four bankruptcies. He has many of us hypnotized. Since civics is rarely taught anymore he has many of us believing that he could actually do things like building a wall along the Mexican border and making Mexico pay for it. The real danger is that he will do by fiat the stuff he says he will do, which will be against the law. However, he will be counting on the American people to stand by his lawlessness. In short he is showing every sign of being a fascist: an American Mussolini. His tendency to double down suggests that he believes the end justifies the means.

Is there a sane Republican on the debate stage? The lone sane one remaining is Ohio Governor John Kasich, who recently released a damning video on Trump. Due to his poor fundraising it will largely be ignored. What should a sane Republican do? Since Republicans supposedly stand on principle, those who have any left should bail. Perhaps John Kasich and Jim Webb could form a party for sane moderates. There are Republican candidates who if they showed spine could also set an example by leaving. You know most of the candidates on stage don’t believe half the crap they are spouting, including Trump who is more about the end than the means. It’s largely Trump’s presence that has them saying such weird anti-immigrant stuff.

I study American history and frankly I can’t think of a time in our history quite as dangerous today. Our constitutional government is seriously threatened by a Trump presidency. Trump is showing that he has neither morals nor scruples and will do or say anything that will get him nominated. Polls seem to be bearing this out. Democrats will nominate someone sane, but they will need someone sane but passionate to close the enthusiasm gap. Hillary Clinton is not that candidate. However, Bernie Sanders is.

The 2016 election will be an enthusiasm election. Whichever side has more of it will win. Traditionally you could count on the American people to act rationally, but not this time. Which leaves me (an agnostic) considering prayer. Pray for our country.

Open season on a fixed income

The Thinker by Rodin

It’s open season time and you know what that means. For most of us it means not bothering to take the time to see if there is a better medical, dental or vision plan out there. And by “us” I definitely mean “me”, at least until this year. Although I retired in 2014, I was working for most of it so it was easy to go on autopilot in 2015.

This year though I am fully retired and living on perhaps seventy percent of my previous income. This year although our expenses have gone up, for some reason my fully indexed cost of living pension won’t be, a factor somehow of falling gas prices. I’m not alone. Lots of pensioners and social security recipients feel like they have been cheated. The problem is that the official cost of living index is bogus. While I might spend a couple of hundred dollars less in gasoline this year than I did last year, food prices have gone up and eating is not optional. If prices are holding steady, the word hasn’t gone out to my city. The real estate assessment was $15.80 per thousand dollars of assessed value this year. In 2016 it jumps to $16.16. Moreover I just bought a new house for about $486,000 but it’s been assessed at $500,000. This means we need to pay $401 more just in property taxes yet with no increase in income.

So value is becoming more important. We’ve been on Blue Cross for more than a decade, but Blue Cross too is tightening the screws. With no changes we would pay over $650 a year more in premiums. Copays have been increased as well, up $5 each for primary care and specialists. We (my wife in particular) see lots of doctors. It’s not hard to rack up a hundred visits between the two of us per year. We could easily spend another $1000 a year on health costs next year for no increase in services. We would have to do this with no cost of living raise.

Thus I felt I no longer had the luxury of inertia. As I started to examine my options, I quickly realized why I had punted all these years. It’s because while choice is good in theory when it comes to health insurance it is mind-numbingly exasperating and time consuming. It’s something of a crap shoot as to which plan offers you the best value, since you have no way of knowing how much care you will actually need. About all you can do is use past years as a benchmark, and that means analyzing all your health expenditures. (Note: if you are a federal employee, federal annuitant or survivor of either, Checkbook has a useful guide that costs less than $10 that can help a lot.)

Since I spent a day just analyzing health insurance options, it’s a good thing I am retired. I doubt I would have this sort of leisure if I were still working. I had to sift through the details of all the various plans and see if I could find some magic combination that is not overly expensive, rated reasonably well and with most of our doctors “in network”. I had to analyze premiums, deductibles, copays, limitations on types of services, and which of our doctors were on each plan. I’m still not entirely clear which plan offers the best value, but it’s pretty clear it’s no longer Blue Cross.

I can also change my dental insurance and add vision insurance during open season. I already have a long term care policy, but no insurer would insure my wife so when that time comes we’ll have to depend on savings. Which opens up another can of worms that retirees have to grapple with. If you have some major and unplanned costs, where do you get the money?

Since we recently settled on a house a lot of our reserves have gone to pay lawyers and other busybodies. We’re hardly without savings but if I had to put my hands on $75,000 or so in cash it would be a challenge. A 401-K or IRA is not like a faucet that you turn on and off at whim. You generally get just a one chance a year change to adjust the spigot – during open season.

We supplement my pension with a modest monthly withdrawal from my 401K. On the advice of my financial adviser, I’m limiting withdrawals to 3% of the portfolio. This will in theory keep our nest egg secure, not growing in value (over inflation) but not losing value either. I can up the withdrawals to say 4% and slowly build up cash reserves at the expense of paying more income taxes and a smaller portfolio. I can hope no major expenses like this happen. I can get another home equity loan and use that when needed, but that money certainly won’t be free. The other alternative is to get another job, something I’d prefer to avoid since leisure is the whole point of retirement.

Since when you are retired you can’t easily change your income and expenses are hard to control sober retirees have to look forward a lot. Our new house is nice but like every other house it will move toward decay. We’ll eventually need money to replace the air conditioner, roof and buy cars when the old ones expire. This didn’t used to be a problem. I had enough income where I could pay for most of these expenses out of pocket or from our savings account. Now I have to anticipate them.

Unable to think of a better strategy, I looked at what these expenses cost us before. I made some realistic estimate of when these expenses would hit and what they might cost then with inflation. So I’m setting aside some of our income to draw from for these expenses in the future. It’s not an exact science, but it’s a start. It’s also sobering. I’ve created a car replacement fund assuming we’ll buy two cars for $25,000 each in today’s dollars, one in 2019 and one in 2023. To reach the goal I must place $481 of our income monthly into an escrow account. Similarly for all these future house expenses, I’ve created a capital fund. If my numbers are accurate, $343 a month set aside for these expenses should cover them.

All this is well and good but it leaves less money to actually enjoy your retirement particularly when your expenses go up when the government says they haven’t. Which is why I’m reluctantly becoming value-driven in retirement. Every expense needs a second look, including our health care costs. So I need to shop around.

As for health insurance, since I am an ex-federal employee I’ll probably bid adieu to trusty but expensive Blue Cross and say hello to the National Association of Letter Carrier’s plan instead. Lower premiums, lower deductibles, similar services and a reasonably good choice of doctors will probably go a long way to keeping these expenses unchanged in 2016. We’ll see. If not I’ll be crunching the numbers again in a year at the next open season.

Health insurance in the United States is needlessly complex. If there must be competition then the government should require that all plans offer the same services so we could shop around more easily. Or perhaps we could do what every other first world country does: create a national health care system. Then instead of figuring out how much health you can afford you could simply get the care you need instead. Sign me up for that!

The roots of terrorism

The Thinker by Rodin

Ever get this strange feeling of déjà vu? Last Friday’s horrific terrorist events in Paris are being called France’s 9/11. Last I checked there were 129 mostly French citizens murdered in six separate but obviously well coordinated terrorist incidents in Paris, and more than three hundred wounded. I don’t think it’s coincidental that these incidents occurred on a Friday the Thirteenth. The date may not have the same unlucky connotation in France that it has here in the United States, but ISIS (which admitted to sponsoring the acts) and al Qaeda know the power of marketing and symbolism. Anything that they can do to make such events more memorable will be done, and tying events like this to memorable dates is one.

Shortly after 9/11 here in the United States, our military did the expected things. We sent our air force into Afghanistan. In our case it worked reasonably well, at least at first, because we destroyed the Taliban government there that hosted al Qaeda. We installed our own more secular and western government in its place; a form of government that was not natural to the region and which unsurprisingly caused a strong insurgency.

Fourteen years later al Qaeda is a diminished presence in Afghanistan, but Afghanistan is hardly stable, secular or particularly democratic. The Taliban are resurgent and it looks like more civil war is ahead there; in fact it has already begun. Our leadership took being caught with its pants down as a sign that America had to be proactive to address these threats, so we unwisely toppled Saddam Hussein. The state of ISIS, such as it is, is a direct result of that unwise action. Indirectly, the U.S. has contributed to last Friday’s events.

The French government of course quickly decided that their own 9/11 could not go unanswered, so it sent its considerable air force to bomb targets in Syria controlled by ISIS in coordination with our own. This was done to presumably degrade and destroy ISIS that just last week President Obama unwisely asserted was contained. ISIS proudly admitted that it had planned and coordinated these attacks. It was done for the same reason that Osama bin Laden planned and coordinated 9/11. His goal was not so much to destroy the United States, as it was to use the U.S. as a proxy to further his cause. And it worked amazingly well for him, actually better than he imagined as our invasion of Iraq introduced anarchy that eventually allowed ISIS to rise.

Presumably France won’t go the extra mile the way the United States did in Iraq, but it does not have our vast military resources anyhow. Presumably its leadership is a bit clearer-headed than ours was after 9/11 and realizes these military strikes are more to satisfy their citizens’ cry for a counterpunch rather than to meaningful affect a particular outcome.

Fires remain fires only as long as they have a combination of fuel and oxygen. Understood in this context, ISIS’s actions were predictable. The neophyte state is rather amorphous but it certainly needs energy to continue. The oxygen comes from more people committed to their ideology, and the fuel comes from its funders. ISIS exists in a resource poor part of the Middle East, so most of its money actually comes from outside the state, i.e. those with money that support its radical version of Sunni Islam. To get the money it needs to continue to demonstrate it has power and can draw recruits. So going for soft targets like innocent civilians in Paris is logical. It’s relatively easy to demonstrate that it can execute power over a free society like France. Such acts will inspire many and it will impress its creditors. It allows the state to continue because its military has been significantly degraded by allied airstrikes and by the many forces engaged on the ground in the region.

Fourteen years after 9/11 it’s obvious from these incidents that if there were easy ways to contain terrorism they would have worked by now. In fact, if there were hard ways of containing terrorism, they would have shown affect by now as well. Invading Iraq and trying to stand up a secular government there is a hard thing to do. Actually there has been a lot of progress, but it’s mostly unseen. While intelligence within ISIS is poor, our intelligence capability has improved remarkably during this time. It’s just not enough in a free society to stop periodic incidents like these, although many do get deterred and prevented. A state cannot know everything and call itself free.

It’s possible that with time ISIS will be degraded and destroyed as President Obama hopes. However, even if this victory happens, it doesn’t solve the problem. Ideology in general is the real problem. If ISIS goes and the dynamics of radical Islam are not addressed as well, it will simply spring up elsewhere in other forms in the Middle East. Wiping out ISIS in other words is merely winning a battle. The real war is to change hearts and minds.

In 1995 the United States endured the Oklahoma City Bombing, an act of domestic terrorism. This act was similar in size and scale to last Friday’s incidents in Paris. Its perpetrator Timothy McVeigh was not particularly religious, but he was dogmatic. He was deeply conservative in the sense that he was upset about changes happening in America. He believed that changes disenfranchised white people, and that these changes were being achieved through the federal government through what he perceived as its pro-liberal policies. At its root, McVeigh’s complaint was that he was against democracy when it did not favor his interests. He believed enlightened ones like him had the duty to change things through acts like terrorism when this happened.

Basically McVeigh was an authoritarian, something that resonates strongly with many Americans, most of who align with the Republican Party. Stripped of its religious façade, that’s what the War on Terrorism is really about: it’s a struggle between those powerfully pulled to an authoritarian framework versus those who believe government should be run democratically come what may. The roots of this conflict might very well be genetic, as there is convincing research that shows that liberals and conservatives are wired differently right down to their DNA. Conservatives believe in authoritarianism and feel in their bones that they must follow the leader like a sheep providing they can trust their leader and conversely to wholly distrust the leader when they don’t (hence their utter contempt for President Obama.) You can see this in Donald Trump’s appeal. Conversely, liberals are comfortable with ambiguity and want to empower all the people.

This conflict is probably not going to go away with ISIS or even al Qaeda. However, it’s clear that within the last hundred years or so liberals have been winning promoting a more secular, humane and tolerant world. Regardless of the rationalization that impels terrorists (God, Islam, racism, communism) the common threat is liberalism (i.e. progressive social change), which is manifested through secularism, representative democracy, freedom and tolerance for those unlike us. If more intolerance in France can be created then France begins to model ISIS in spirit. Islam is more likely to take hold in a country where the culture favors authoritarianism.

ISIS isn’t explicitly aware of this, but in this mindset requires intolerant and authoritarian governments. It fights for a world where government enforces its own radical brand of Islam worldwide, but this is a fight that can never be won. However, it can inadvertently be a proxy in a larger and more nebulous cause to put in power those whose DNA makes them comfortable with the leader-and-follower model, and that reviles tolerance and ambiguity.

France must do what is pragmatic to lessen the likelihood of future incidents. However if in response it discards its values of freedom, secularism and tolerance then whether ISIS thrives or dies does not really matter: the uber-cause of authoritarianism wins, and France loses.

2016 Democratic Presidential Debate #2

The Thinker by Rodin

Gone were the two pretend candidates. After the first debate Jim Webb figured out he was too mainstream to run as a Democrat this time around, sort of like the way John Kasich is figuring out no one wants to hear him because he talks common sense. Lincoln Chaffee, a former Republican himself like Webb, got in the first debate mainly because he could, but wisely realized he was getting zero traction and the longer he stayed in the sillier it made him look, so he also dropped out. Which left former Maryland governor Martin O’Malley as something of the odd person out in this second Democratic presidential debate from Iowa last night.

Like the first debate it was civilized and sober, a marked contrast to the freewheeling feel that often accompanies the Republican presidential debates. This debate though did get a bit heated from time to time, in part because the CBS moderators prodded the candidates. In one case Bernie Sanders did not rise to the bait when asked about a remark he made on Clinton’s emails. Clinton though felt it was okay to take a jab at Bernie on gun control, casting his votes against certain gun control votes to hers in favor. It put Sanders in something of a vise, because he voted the way his rural constituents wanted. Sanders though could land a little jab at Clinton by focusing on her catering to big banks, which she attributed to a natural reaction following September 11 when lower Manhattan had suffered such devastation. The logic was stretched, to say the least.

Sanders at least had authenticity on his side, but it didn’t seem to matter much. He pointed out that Clinton took money from PACs, while his campaign was PAC-free, and thus not tainted. The reason it didn’t help much is because Clinton is now a seasoned debater and not easily ruffled on the stage. And Democrats would be happy to have any of the three debaters as their party’s nominee. The debate was a bit sharper and at times heated, but I doubt it changed anyone’s preferences except possibly Martin O’Malley will get a modest bump with a solid and polished debate performance.

The terrorist incidents in Paris that killed 129 people on Friday of course were discussed at the start of the debate. The candidates agreed that terrorism like this was not the responsibility of America to solve alone, but generally was something on which America should lead. Sanders rightly pointed out that most of these sorts of wars come back to bite us. O’Malley got a gotcha question when asked if he could point to experience that would show he could handle complex international incidents like this. No governor of course would have this sort of experience so it was pointless to ask.

Sanders struck me as a little more grounded. In discussing terrorism, he argued that climate change was fueling terrorism. This is true in Syria, where a long-term drought is likely a result of climate change and feeding instability there. Unquestionably as the climate changes there will be more instability and mass migrations, and the latter will feed the former. Sanders was also correct in his analysis that the Defense Department’s priorities were pretty screwed up, with most of it going to maintain an inefficient infrastructure designed to address 20th century military problems, and comparatively little going to address terrorism itself. All candidates walked a fine line on immigration but unanimously agreed that Islam itself was not a problem, only those perverting it. There was none of the xenophobia against immigrants we saw in all the Republican debates so far.

All want to make college more affordable but Clinton wants to make is so students and parents are stakeholders. This effectively meant that she does not want a wholly free college education for our students. No one addressed the larger issue: with so many failing schools, fewer students are graduating with the skills to tackle college. A holistic educational solution is needed. Charter schools are probably contributing to the problem, as profit-driven schools have no incentive to keep poorer performing students.Overall O’Malley did well, but not enough to make him look unique or to offer a compelling reason to vote for him over Clinton or Sanders. Democrats are blessed with seasoned debaters as candidates, so if there are no major gaffes, the dynamics are unlikely to change. In this sense these debates aren’t particularly helpful for candidates gaining more popularity. I don’t expect much change in the polling in the weeks ahead.

Kudos to CBS News for live streaming the debate for all.

2016 Republican Presidential Debate #4

The Thinker by Rodin

By now these candidates are all getting a bit uncomfortably familiar — at least to those of us that tune into these debates. With some exceptions though they all pretty much sound the same and parrot the same ideas. What made this latest debate a bit more interesting than the other ones is that from time to time some actual debating happened.

This debate, hosted by the Fox Business Channel and held in Madison, Wisconsin had a heavily conservative tone to it, which made the candidates happy after the last debate when the moderators had the audacity to backtalk the candidates with actual fact checking. Moderator questions came laden with assumptions that doubtless made its owner Rupert Murdoch happy. Stuff like this from moderator Maria Bartiromo:

Today the national debt is at record highs and growing unsustainably. Interest will be the fastest-growing part of the federal budget, tripling over the next 10 years. Social Security, the lifeline of millions of American seniors, is rushing toward insolvency.

In fact, the budget deficit has been cut by more than two thirds since the start of the Great Recession, virtually zero interest rates have made financing the debt a lot more sustainable, Social Security is reaching a point where it may pay out more than it receives, but is not anywhere close to insolvent as its assets are invested in U.S. Treasury Bills that will be redeemed to pay benefits. Given the false assumptions that underlined many of the questions asked, the only surprise was that some actual debating took place. As usual, it was the marginal candidates that did most of the pot stirring, i.e. John Kasich and libertarian Rand Paul because what do they have to lose?

Kasich went for being the only grownup in the room again, which he was. In fact much of the time he sounded like a Democrat, which was why toward the end he was actually booed by the audience. Kasich did feel neglected and felt compelled to barge into the debate at inopportune moment near the end, but in fact he got plenty of airtime. Kasich’s sensible and pragmatic solutions though were not something fellow candidates and the audience wanted to hear. I found myself agreeing with much of what Kasich had to say. If he had a realistic chance at the nomination, the party might also have a realistic chance of winning next year’s election.

Rand Paul was the other discordant note, in particular when he called out Marco Rubio for not being a true conservative because he wanted to give a tax credit to lower income people, which he accurately portrayed as an entitlement. On foreign policy Paul was definitely the isolationist and kept noting that defending the country costs lots of money and our foreign interventions usually backfire. Again, this did not win him any favors from other candidates or the audience because cognitive dissonance like this apparently gives them severe migraines. Everyone was like: just shut up Rand and John already!

I really wanted Carly Fiorina to just shut up already. She went on an impassioned rant about the need to cull regulations and to have zero-based budgeting. However, she wouldn’t adhere to the regulations of the debate to stop talking after her ninety seconds was up. Two bells calling time went blithely ignored as she just kept yammering and yammering. While the most egregious violator, she was hardly alone. One of the biggest yammerers from the last debate, Chris Christie, has been disinvited to the debate and sent to the humiliating “undercard” debate instead.

Picking winners was hard, but picking losers was easy. Kasich is likely to get undercarded soon because he speaks to a vanishingly small moderate base. Ditto with Rand Paul, for stroking libertarian feelings largely absent in the Republican Party. And Carly Fiorina is coming across as a simply nasty lady, so she will likely get undercarded again soon, particularly given her mediocre polling numbers which barely qualified her for this debate.

Donald Trump specializes in nasty, but with a dose of humor that Carly doesn’t have. He was repeatedly called out by Kasich for his impossible to enforce plan to deport all undocumented immigrants but as usual he said he could part water and get it done along with his thousand mile wall along our border to Mexico, which presumably they will somehow pay for. On this topic none of them noted that President Obama has been vigorously removing undocumented immigrants, something that gives most Democrats heartburn. However, they did latch on to his executive order that makes it less likely that these immigrants who are caregivers would be deported anytime soon. Apparently it’s really evil to keep parents and their legal children united.

Jeb Bush managed to improve his performance but not in a distinctive way. Marco Rubio held steady, coming on strong but falling back toward the end of the debate in part due to lack of airtime. Ted Cruz will probably get a bump, as he stayed with nasty and unrealistic, which is what Republicans want to hear. He did say he wanted to eliminate the Department of Commerce twice, which would be quite a feat. He also wants to eliminate the IRS, which is a great thing if you don’t want to go to prison for not paying your taxes. Cruz was mostly in comfortable La-La Land, which is where most of the audience wanted to be as well.

There were other amusing faux pas:

  • Marco Rubio actually talked about the “Democratic Party” when every good Republican knows the Right and Fox News has rebranded them as the “Democrat Party”.
  • Ted Cruz also talked about going back to the gold standard and how great the country was when we were on the gold standard. The Washington Post wonk blog though noted that the Great Depression was caused by slavish adherence to the gold standard.
  • Ben Carson claimed that by 1876 the United States was the largest economic power in the world, which no doubt was news to the United Kingdom, which claimed that title at the time.
  • Carson also said that the Chinese were deeply involved in the conflicts in the Middle East, while China has wisely largely stayed out of the conflict.
  • Donald Trump said we are losing jobs like crazy when we added 270,000 jobs just last month and we have netted jobs every month for the last seven years.
  • Macro Rubio said there was nothing more important than being a parent, effectively slamming singles.
  • Rand Paul wants everyone to pay a flat tax of 14.5 percent, less a home mortgage and charitable deductions. So a poor person earning $10,000 a year should pay $1450 a year income taxes, in addition to the sales taxes they disproportionately pay? It’s sounds fair I guess in Rand Paul’s insular world.
  • Carly Fiorina thinks it’s bad that Obamacare brought the uninsured rate below ten percent because of socialism or something.
  • Ben Carson said only 19.8 percent of black teenagers have a job, which would mean 80% of black teens do not, when in fact more than fifty percent of black teens do have jobs.

So there was the usual obfuscation and erroneous claims, par for the course for these fact-free debaters, but it seemed the more wrong the statistics were the more the audience ate it up. More dubious facts will doubtless be revealed in their next debate, which fortunately won’t be until December.

Next up: a second Democratic debate this weekend.

2016 Republican Presidential Debate #3

The Thinker by Rodin

I’m not much on Twitter but I decided that if I was going to watch the latest Republican Presidential Debate at least I could be trendy and live tweet it. Alas, it didn’t occur to me until shortly before it started. So unless you happened to follow me on Twitter you wouldn’t have known. (And if you aren’t following me on Twitter, why not? Follow me here.)

Those asking questions got dinged by a couple of the debate participants. The questions did not seem too bad to me and if the questions seemed unusually snarky then it’s because the candidates don’t watch much CNBC. I’ll agree the question on fantasy football was a bit silly, but most of the rest were actually fair questions. The questioners were not shy about pushing back with facts when the candidates steered away from toward their own versions of the truth. I’d like to see more of this in future debates. In fact, live fact checking should be a feature of debates, with check-ins from the fact checkers periodically so viewers could know when candidates are blowing a lot of smoke. So overall, I liked CNBC’s format, although I know I am in a minority.

Live tweeting the debate also gave me a great way to take notes, and I use them here as memory jogs. You can see all of them on my Twitter feed.

I didn’t like the opening question when candidates were asked about their weaknesses. This is another “When did you last stop beating your wife?” sort of question. There’s no good way to respond to it. You invariably pick some tiny little thing no one will care about and go with that, which always comes across as insincere. In any event, it takes enormous ego and chutzpah to run for president in the first place. Just by declaring your candidacy you are stating that there is something extra special about you compared to the rest of us.

You could tell Donald Trump didn’t like this debate any more than the last, mainly because he wasn’t allowed to dominate it. He looked sort of neutered and peevish. It would not surprise me if he invents a reason to opt out of these soon. He did manage to get off one attack on John Kasich, but only after Kasich had offered the opinion that many of his policy solutions were nonsense, which in fact they are. This immediately elevated Kasich in my mind, which sort of gave permission for others in the debate to speak moments of actual truth. Some of these moments were pretty bizarre. Ted Cruz, whose campaign is largely funded by moneyed business interests, said that principally the middle class was supporting his campaign. Carly Fiorina cried out about “crony capitalism” which she said was a result of corrupt government when it’s a result of policies championed by pretty much all Republicans since after Teddy Roosevelt to put the interests of the moneyed and businesses ahead of everyone else. That’s what caused our oligarchy.

Many of these candidates went into friendly la-la land when responding to questions. Ted Cruz basically said that Democrats were communists. Even Senator Joseph McCarthy would not have gone this far. Everyone said that Social Security and Medicare were failing systems but no one bothered to mention that Social Security would be solvent if the payroll cap was simply raised. No, benefits had to be cut and the retirement age had to be lifted. For many poor people whose life expectancy is about 70, this effectively means never even getting to retire. Some talked about reigning in government spending, but not one of them had the courage to say that you can’t keep cutting taxes and solve the budget deficit.

Certain words grated, like Chris Christie’s repeated declaration that the government was “stealing” your social security deposits. It was known from the start that the system was pay as you go system, not a lockbox system. The reason why it is under stress is there are fewer workers paying into the system than in the past, something that could be mitigated with immigration reform. These are the real causes of the actuarial problem; there was never anything nefarious about it.

Kasich again was the sanest person in the room but also its least photogenic. He looked grey, washed out and unattractive as well. I enjoyed watching Trump, particularly the violent way he turned his neck toward someone saying something he doesn’t like. Ben Carson looked so unanimated it’s a wonder why anyone would be enthusiastic about him. Ted Cruz bizarrely talked about how much he respected the constitution, even while he and his party worked hard to keep people they don’t like from voting. Jeb Bush had a hard time getting noticed or even called on. Trying to reproach Marco Rubio for voting so infrequently got him bitch slapped by an animated Rubio. Pundits said Rubio won the debate. I doubt that, but I do think Bush lost it by sounding petulant and insincere when he did talk, and by otherwise fading into the background.

No one asked the obvious question about Trump’s wall: even if you build it, how do you keep people from digging tunnels under it? It has been done for decades as a way to smuggle both illegal immigrants and drugs into the country.

Policy though did not matter as much as attitude, or maybe I should say sassitude. They were going for applause and that mainly occurred by berating the questioners or finding some other way to sound mean or pissed off. This record has been played too many times before. You would think even Republicans would be tired of it.

If Rubio “won” the debate, it’s only because he made himself look marginally better than the rest of the tired candidates and was more prepared with scripted comebacks. It’s an advantage of relative youth, perhaps.

Anyhow in less than two weeks we get to go through this whole tired scenario again. I’ll try to live tweet that debate as well as it helps to stay awake through it. They sure don’t make it easy.

The grownup in the hearing room

The Thinker by Rodin

Did you watch Hillary Clinton’s testimony in front of the House Select Committee on Benghazi on Thursday? Okay, most us did not, at least we did not watch all eleven hours of it. This includes yours truly. I did watch clip after clip online and the more I watched the more engrossed I got. I realized that Clinton did a Benghazi on the committee. It was a kind of charmed and karmic experience that did exactly the opposite of what the committee intended. It made Clinton look good, human and demonstrated she had both great leadership qualities and a great legal brain. It also demonstrated that she is grounded.

As for the members of the committee, at least the Republican ones, the longer it went on the more foolish they looked, as they became increasingly nitpicky. They endlessly plumbed topics that really didn’t matter, such as her relationship to their longtime political friend Sidney Blumenthal. They seemed certain that if they kept stroking those ashes there would be an ember there.

Eight hours of testimony, eleven hours of elapsed time essentially revealed nothing they hadn’t heard before. Three years earlier she had gone before the same committee and told essentially the same story. She spent a day and an evening essentially repeating herself while always responding in a civil manner to members of the committee that frequently sounded shrill and like loose cannons. At the end of it all, even the committee’s highly partisan chairman Trey Gowdy was forced to concede they learned nothing new and that the hearing was a waste of their time.

Meanwhile for those tuning in Hillary Clinton got eight hours of airtime that allowed her to demonstrate pretty convincingly that she would make an excellent president. She proved to be both measured and entirely unflappable, but also demonstrated that she was grounded and pragmatic. Many Americans saw perhaps for the first time a woman completely at odds with her stereotype. To some extent this included me, as I prefer Bernie Sanders to her for the Democratic presidential nomination. That’s still true after her testimony, but I no longer believe that she would not be a very capable president or couldn’t quite master the complexity of the issues she would be dealing with. Arguably there are few better jobs to prepare for the presidency than being Secretary of State, given that the secretary has an impossible and largely thankless job of trying to bring some sense of order to a world awash in political change. After trying to triangulate Israel and Palestine, dealing with a Republican congress must be relatively simple in comparison.

Americans watched her model a future president and watched Republicans devolve into the worst of their stereotypes, making them that much easier to loathe. She looked sensible; they looked like partisan fools. She looked mainstream; they looked extreme. She sounded pragmatic; they sounded obsessed bordering on deranged. She looked like she was tethered to Planet Earth; they looked like they were on a planet of their own.

They kept trying to frame questions so that they could not help but get the answer they wanted, going with a “When did you stop beating your wife?” meme. Reflecting their compulsive and black and white thinking, one congresswoman would allow no ambiguity in Clinton’s answer: yes or no. No yes but, no no but just an absolute answer that could be later used to prove she is a liar. And of course they asked the sorts of questions that go beyond reasonable. Can any of you remember what you had for dinner seven nights ago? Committee members expected perfect recall of events that happened years ago, as if Clinton were dictating a journal of events into a Dictaphone every fifteen minutes. As the hearings dragged on it just got more and more wacky and surreal. At some point you just had to wonder: how the hell did these people ever get into Congress in the first place? Exactly whom do they represent?

Yet Clinton remain largely unflappable and serene, driving in a contrast that got more marked over time until the committee looked more like a parody of a committee than an actual committee. For Clinton, the hearing essentially gave her eight hours of free airtime and drove in exactly the messages that she wanted to deliver as well as demonstrating beyond any reasonable doubt that she was highly qualified to be our next president.

Two days later, I get the feeling that Thursday’s hearing was something of a landmark, perhaps the most notable hearing by a congressional committee since the Watergate days, doubtless to be studied over and over again by academics and scholars as an object lesson on how not to hold hearings.

Clinton didn’t need to orate. She didn’t need to scowl or condescend. She just needed to be the grownup in the room. She was pretty much the only one.